Rupee rises slightly on remittances, exporter dollar sales

Thursday, 22 March 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan rupee rose slightly on Wednesday as exporters sold dollars and remittances boosted inflows, while the gains were capped by importer demand for the US currency in late trade, dealers said. The rupee which traded at 155.90 per dollar in early trade, closed at 156.05/15 per dollar, recovering slightly from Tuesday’s 156.08/20 close.

It touched an all-time low of 156.20 per dollar on Monday, which was hit on Friday. “There were dollar conversions by exporters but the latter part of the day saw some (dollar) demand from a state bank,” said a currency dealer.

The rupee has weakened 1.69% so far this year after declining 2.5% last year and 3.9% in 2016.

The currency is expected to remain under pressure on continued importer demand for dollars ahead of the traditional New Year in April, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, they added. The International Monetary Fund said on 9 March that Sri Lanka’s economy remains vulnerable to adverse shocks due to its large public debt and low external buffers. The government must repay an estimated Rs. 1.97 trillion ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest. Foreign investors sold government securities worth a net Rs. 3.1 billion in the week ended 14 March, central bank data showed.